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LAHORE, Aug 10 (APP): Federal Tax Ombudsman (FTO) Coordinator Saif-ur-Rehman has urged the State Bank of Pakistan (SBP) to gradually reduce the policy rate to a single digit.
In a statement issued here Sunday, he highlighted that reducing the policy rate would provide small and medium enterprises (SMEs), access to loans at lower costs which would boost economic activity, create employment opportunities, and enhance exports.
He stressed that the current high-interest rate is non-lucrative to investment and places an excessive financial burden on industries already struggling with inflation and economic challenges.
He urged policymakers to adopt business-friendly monetary policies to support local industries and promote economic stability. He also pointed out that regional competitors offer lower borrowing rates, making Pakistani industries less competitive in the global market.
Saif Ur Rehman suggested that lowering the policy rate would restore investor confidence and attract foreign direct investment (FDI). He reiterated that a stable and growth-oriented economic policy is crucial for Pakistan’s economic revival and long-term sustainability.
He argued that high borrowing costs under the current monetary policy have stifled business expansion, hampered job creation, and limited access to affordable financing for industries, particularly SMEs. He emphasized that lowering the policy rate would reduce loan costs, enabling businesses to invest in modernization, scale up operations, and enhance competitiveness amid persistent economic challenges.